'The theatre of it gets in the way': Shayne Elliott
The Federal Government’s bank levy on the major banks and ongoing parliamentary inquiry should serve as a warning to the sector that it must not take its operating environment for granted.
This was ANZ chief executive Shayne Elliott’s response to a question on the new bank tax at a recent RFi Group / AB+F roundtable in Melbourne.
“I think the community takes it for granted that somehow the system works and we’ll always have safe banks that deliver what we want. The idea that anything could go wrong is so remote to people,” he said.
“And that’s spread a kind of an overconfidence if you will about the robustness of the system, potentially. It’s a little bit different if you’re in the US, UK or other places and you’ve seen what can happen when it does go wrong.”
Elliott reminded the industry that it has a role to play in educating customers, shareholders and the general public.
“I think that we as an industry took it for granted that we had a license to operate and that we would just be left alone. And we forgot some basic things about making sure we were actually communicating to the community what we were doing; about the vital role that we do play,” he said.
“I jokingly said to somebody that a lot of people think that when ANZ reports $7b in profit that I take it home in a suitcase. It’s our job to remind people that our shareholders are you. If you have a job in Australia it is almost certain you’re a shareholder in the banking system.”
According to Elliott, ANZ focus groups had encountered the “weird situation” where people repeatedly describe the banking industry as “greedy” while being very happy with their own bank.
“I’ve thought about it hard, and I can’t think of another industry where the industry defines you more than your individual brand. People don’t talk about the supermarket industry. They have an experience with Coles or Woolworths or ALDI, and they quite happily differentiate them,” he said.
“So it’s quite unusual that you are defined by this, but actually customer satisfaction has never been higher. When you do the research, when you ask people unprompted what they worry about in Australia, banking and finance doesn’t make the top 30. So it’s not something that people wake up worried about. They actually trust the system will work and that it’s reasonable.
“The problem is that it’s easy to ignite if you want to. So what we need to do is make it less easy to ignite. The reason it’s easy to ignite is because you can point to some bad things that have happened in the industry. We need to own up and take responsibility for those things, and say, ‘These things were wrong and we’re going to fix them, and we’re going to make sure they don’t happen again.’
“We need to have a period of time taking accountability for those things and actually making real change. Our problem as a bank is that it’s really hard to differentiate ourselves, because of that issue about the industry defining us as opposed to the bank.”
Elliott added that he had taken away some positives from his two appearance before the House of Representatives Economics Standing Committee, quipping that it was “a really good way to learn more about the company actually”.
“I don’t find them that destructive. I think they’re legitimate questions that get asked. They’re legitimate concerns that the community have. They have legitimate questions about the way this industry operates and its behaviours. Should we be accountable? Yes, we should. I have no issue turning up and answering all those questions. I think they’re fair things to answer,” he said.
“(On the other hand) I think there’s a potential cost or disruption that comes from making it so public. The theatre of it gets in the way. If you’re sitting down and saying actually the real purpose is to answer these questions, I’m not convinced that that’s the best way of doing it.
"I know it holds us to account but if you really want to figure out open data or whatever I’m sure we could all sit around the table and sort that out. I don’t know that it’s the best environment; it’s a bit formal and all of that stuff, but I don’t have an issue in doing it.
“I kind of get the impression that it’s running out of steam already in the sense that the first one was very theatrical and there were lots of things. To the inquiry’s credit the second one they just stayed on the same 10 issues and we just refined further. That was good.”
For the first and second part of the Shayne Elliott interview, click here.